Executing few Ideas Well

There is no way to learn and appreciate about the fundamental principles of value investing better than “doing it yourself”, being “in the market”, facing bumps and tough times and then eventually realising the gains you expected . I don’t think there could be any more brutal tests in any field than the public equity markets . They will test your resolve, conviction and patience immensely. Some stocks will stay there for years while the rest may get beaten down for many non-fundamental reasons. What you chose to do in those times is the difference between “an average investor” and a great track record. It is not about finding great ideas, it is all about executing your ideas very well.

It is insane how much the industry is focussed so much on finding the next new ideas when all you had to do is to make the most of what you already know. The allure of the new thing and man’s exploratory nature always longs him to expand and expand, without realising the bird in hands are way more than ones hiding in the bushes. I was myself guilty of this for a long time, always excited to look up for the next big thing. But, after seeing the output from the dozens of bets that I made over the last few years, even 2 or 3 of those would have done the job.

The allure of diversification is not just because of the constant urge to find something new; it is also to avoid the feeling of regret and missing out. Extreme concentration and focus on a few ideas may produce better results than spread-out bets, but over the short to midterm, your concentrated portfolio may go nowhere, while in a diversified portfolio of 25 ideas, 20%-30% of your bets will always be in the positive territory to make you feel good. It needs a very different perspective get above this mediocre mindset of consistent returns. Nothing in life comes easy. But that’s why great investors are a rarity.

My love for investing as a craft just keeps on increasing. As I realise more and more, how investing is a perfect playbook for minimalism, it makes me realize how all that to great investing is executing a few good ideas well.

As long as the monthly bills are taken care of, an individual investor has the freedom to have an unbelievable independence to execute on his conviction. While some of them will be wrong, but the select fews which are right will be more than enough. The focus will then shift more on the process of making the journey of investing beautiful.

Akhil D.